This announcement was made on Tuesday and follows recent actions by the U.S. government, which implemented a further 10% tariff on imports from China and revoked a customs exemption that previously allowed low-value packages to enter the U.S. without incurring taxes. Canadian and Mexican officials, on the other hand, successfully negotiated a month-long delay for the 25% tariffs that had been threatened by former President Donald Trump.
The recent decision will have a significant effect on online shopping platforms such as Shein and Temu, which are particularly popular among younger consumers in the U.S. for their affordable fashion and other products typically shipped directly from Asia.
The capability of these companies to maintain low prices is largely attributed to economical shipping through postal services, alongside the prior “de minimis” exemption that allowed tax-free shipments valued under $800.
With the Postal Service’s temporary ban, delays in deliveries are likely, which could also hint at increased prices in the future.
What exactly did the U.S. Postal Service announce?
The U.S. Postal Service issued a notice indicating a temporary halt to accepting inbound parcels from the China Post and Hong Kong Posts, effective until further notice. However, letters and flats—mail that is up to 15 inches long and ¾ inch thick—remain unaffected by this directive.
What prompted this decision?
The Postal Service did not provide specific reasons for the suspension in its concise announcement. However, it came on the heels of the recent revocation of the “de minimis” customs exemption by the former president, which finally removed the ability for consumers and importers to bypass duties on packages valued below $800. This alteration was part of a broader initiative that imposed a 10% tariff on Chinese goods. U.S. Customs and Border Protection had earlier noted that it processes an average of more than four million “de minimis” imports weekly.
What are the implications, and who is affected the most?
The prohibition on parcels means that consumers and businesses will no longer be able to send goods from Hong Kong or China to the U.S. This decision is anticipated to have a heavy impact on Chinese e-commerce companies like Shein and Temu. According to Jacob Cooke, the CEO of WPIC Marketing + Technologies, Shein may experience a more profound impact than Temu, as it has a greater dependence on USPS for direct shipping from China.
“Without this channel, companies like Shein will need to increasingly depend on private carriers,” Cooke explained, noting that this shift would raise logistics costs. In tandem with the recent elimination of the de minimis exemption for most Chinese products, this may compromise Shein’s competitive pricing.
In contrast, Cooke noted that Temu utilizes a semi-consignment model, often dispatching bulk orders to the U.S. before localizing fulfillment. “Because of its sourcing approach for low-cost items, Temu should still be able to absorb increased logistical expenses and maintain its competitive edge,” he added. Neither Shein nor Temu provided immediate responses to requests for comments.
A spokesperson from China’s Foreign Ministry, Lin Jian, stated that China would enact “necessary measures” to safeguard its companies and urged the U.S. to cease politicizing economic matters and suppressing Chinese businesses unreasonably.
What potential strategies might companies adopt to navigate this issue?
Although the duration of the USPS suspension remains uncertain, the move to restrict the de minimis exemption appears to signal a longer-term policy change, according to Cooke.
“Shein and Temu may need to rely increasingly on private carriers to counter the USPS ban,” Cooke said. In the future, Shein might ramp up its U.S. warehouse expansion, while Temu could intensify its semi-consignment model. By sending bulk shipments to the U.S. and handling fulfillment domestically, they could mitigate logistics costs, Cooke noted.
“Bulk shipping and localizing order fulfillment could cut logistics expenses; however, for Shein, this represents a significant disruption to its business model, which heavily revolves around rapidly launching new products and shipping directly to consumers,” Cooke concluded.
